How does Indian Bank treat on Third Party Payment for Import Transactions?
According to Reserve Bank of India update as on 31st May, 2022, the directions on RBI guidelines to Importer bank on Third Party Payment is given below:
B.7. Third Party Payment for Import Transactions
AD category I banks are allowed to make payments to a third party for import of goods, subject to conditions as under:
- Firm irrevocable purchase order / tripartite agreement should be in place. However this requirement may not be insisted upon in case where documentary evidence for circumstances leading to third party payments / name of the third party being mentioned in the irrevocable order / invoice has been produced.
- AD bank should be satisfied with the bonafides of the transactions and should consider the Financial Action Task Force (FATF) Statement before handling the transactions;
- The Invoice should contain a narration that the related payment has to be made to the (named) third party;
- Bill of Entry should mention the name of the shipper as also the narration that the related payment has to be made to the (named) third party;
- Importer should comply with the related extant instructions relating to imports including those on advance payment being made for import of goods.
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